The discussion of a semi-autonomous tax body, which commenced more than 10 years ago, yesterday culminated in the official opening of the Namibia Revenue Agency (NamRA) by President Hage Geingob.
The establishment and operationalisation of NamRA are expected to significantly improve transparency in Namibia’s tax collection efforts to increase State revenue from the N$52 billion expected during the current financial year, which is already N$6 billion less than the N$58 billion collected during the 2020/21 financial year.
The establishment of NamRA stems from a conscious decision by Cabinet to transform existing in-house departments of Inland Revenue and Customs & Excise within the Ministry of Finance into the semi-autonomous tax administration body.
NamRA was established against Namibia’s record of an already high revenue-to-GDP collection rate by the government, averaging 32% of GDP when Southern African Customs Union (SACU) receipts are included or some 22%, excluding SACU receipts.
“The transformation of tax, customs and excise administration function into a semi-autonomous institutional setting represents a distinct addition to the stock of robust national institutions with great latitude of transparency and accountability, thus enhancing public trust in the administration of tax laws. Notably, this institutional reform presents opportunity to achieve greater equity in the revenue administration function,” said Geingob at the launch.
The President referred to NamRA as a macro-critical national institution set to boost national institutional capacity and the resilience of the country to shocks on public revenue.
He noted that when operating in the testing terrain of operational autonomy, NamRA is envisaged to serve as a platform for speedy implementation of tax policy reforms and to be an agile institution, able to keep abreast of developments in business complexity – nationally and internationally.
Said Geingob: “The establishment of NamRA is central to our domestic resources mobilisation agenda. The reform will sharpen our institutional capacity and responsiveness to the complexities of an increasingly integrated regional and global economy. This capacity is best manifested – not only in the ability to collect the right amount of tax fairly and at the right time, but also to enhance the efficiency of the overall tax system in relation to its objectives and to strike a fine balance between taxation and socio-economic development objectives.”
Also at yesterday’s launch, finance minister Iipumbu Shiimi said NamRA is expected to be taxpayer-centric, with the mantra that taxpayers always come first – and as such, should be served with care and a sense of duty.
“Taxpayers should be educated on the benefits principles in the sense that the medicines and health care that they receive in hospitals and education provided to learners, the roads on which we travel etc., are only possible if every individual earning an income of more than the taxable threshold – this being N$50 000 per annum at this point in time, fully declares his/her income and pays tax, irrespective of whether he/she is a minister, cleaner, taxi operator or hair salon owner. It is not about what you do, but how much you earn. It is a national duty to pay tax and non-compliance shouldn’t be tolerated,” said Shiimi.
The finance minister continued that strong (national) institutions are key to the fight against corruption, saying “NamRA is uniquely positioned to strengthen Namibia’s arsenal to combat corruption in collaboration with other law enforcement agencies”.
Meanwhile, NamRA’s first-ever commissioner Sam Shivute, who was appointed last year, told the gathering that revenue collection must be optimised.
“Note that we do not say ‘maximise’
our aim is to collect the fair amount of tax and duties owed to the State and no more. To this end, we will strengthen our risk management capacities so that we can focus on taxpayers and traders who pose the highest risk of non-compliance while leaving honest taxpayers and traders to carry out their business. We must understand the tax gap – and to improve the overall financial position of the State, take concerted efforts to collect arrears.
As much as we want to support our clients to the extent possible, we will not hesitate to use our full enforcement powers to target those who try to cheat the system.
They cheat not only the system but each and every honest Namibian who pays what they owe. This approach also extends to dealing with the cash economy,” Shivute warned.
NamRA was allocated N$79 million in the 2020/21 national budget and is tasked with sufficient tax collection through the enforcement of current legislation. At his appointment last year, Shivute pledged that NamRA will collect taxes without fear or favour when it becomes operational.